SEC sues five people over BitConnect lending program

A civil lawsuit has been filed by the Securities and Exchange Commission (SEC) against five individuals allegedly involved in promoting BitConnect’s “lending program”. BitConnect shut down its major lending platform operations in 2018 following regulatory warnings and fraud allegations.

SEC . Civil Action

at Press release Released today on the SEC website, the authority claims that individuals contributed to the promotion and raised more than $2 billion from retail investors in the unregistered securities offering of the digital assets. The complaint alleges that a network of promoters, four of the five defendants, offered and sold securities as part of the platform’s lending program without being a registered broker and dealer, and without registering the securities with the Securities and Exchange Commission. This includes a flurry of “testimonials”-style videos that, the press release says, have been uploaded to YouTube to justify the benefits behind the program. The complaint states that the promoters received commissions based on their success in soliciting funds.

The fifth person listed in the complaint is accused of “aiding and abetting” offers and unregistered sales, as a liaison between BitConnect and promoters, and as a representative of the company at events and conferences.

In the press release statement, New York SEC Associate Regional Director Lara Shalov Mehraban stated, “We allege that these defendants illegally sold unregistered securities by actively promoting the BitConnect lending program for retail investors. We will seek to hold accountable those who profit illegally. By taking advantage of the public’s interest in digital assets.”

Related reading | Crypto YouTuber Draws Similarities Between SafeMoon and BitConnect

BitConnect History

The platform was initially launched in 2016, in parallel with BitConnect Currency (BCC); The company made use of the so-called “trading bot” and provided high returns to users with daily calculated interest. Within the next year, UK government bodies required BitConnect to verify its legitimacy, and by 2018, operations began to shut down after increased government pressure in the US.

BitConnect CurrencyAt the peak of trading around $500, it immediately dropped more than 90% after the close. State securities divisions began lobbying just before the shutdown, including claiming that BitConnect was a Ponzi scheme, and that BitConnect was not registered to sell securities in their states. Within weeks, BitConnect’s assets were frozen following a temporary restraining order.

It has undoubtedly been a dramatic ups and downs for BitConnect. Take a puff from the past with Writing our NewsBTC after closing the platform.

$XRP is the latest token to face SEC scrutiny. | Source: XRP-USD on

SEC Audit

With continued emergence in broader crypto and blockchain technologies, platforms, and projects, the SEC has been active in recent years. Notably, Ripple’s XRP has been at the forefront of the SEC investigation, and is expected to develop a “Ripple Test” where Howey’s test can be maxed out as part of the SEC review. In general, many see Ripple Labs as being able to beat the SEC’s scrutiny, and Ripple CEO Brad Garlinghouse recently stated that Ripple Labs is very likely to go public after the SEC’s decision. The Securities and Exchange Commission alleges that Ripple has been involved in lobbying efforts to change the public’s perception of XRP.

Related reading | Here’s Why XRP Will Rise Again One Day Despite SEC Fees

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